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| Ofgem to tackle 'complex and unfair energy bills' | Ofgem to tackle 'complex and unfair energy bills' |
| (30 minutes later) | |
| Regulator Ofgem has told energy firms they must offer simpler tariffs to help consumers compare prices. | Regulator Ofgem has told energy firms they must offer simpler tariffs to help consumers compare prices. |
| The regulator said that customers were "bamboozled" by a complex system of tariffs, which have increased from 180 to more than 300 since 2008. | The regulator said that customers were "bamboozled" by a complex system of tariffs, which have increased from 180 to more than 300 since 2008. |
| The "big six" suppliers should also face more competition, Ofgem said. | The "big six" suppliers should also face more competition, Ofgem said. |
| It said it would force these firms to auction off up to a fifth of the electricity they generate, making room for new companies. | It said it would force these firms to auction off up to a fifth of the electricity they generate, making room for new companies. |
| Ofgem said it had also found evidence that the "big six" energy firms "have adjusted prices in response to rising costs more quickly than they reduced them when costs fell". | Ofgem said it had also found evidence that the "big six" energy firms "have adjusted prices in response to rising costs more quickly than they reduced them when costs fell". |
| Competition in the UK energy market is being stifled through complicated tariffs and a lack of transparency, and energy firms had "failed to play it straight with consumers", it said. | Competition in the UK energy market is being stifled through complicated tariffs and a lack of transparency, and energy firms had "failed to play it straight with consumers", it said. |
| Ofgem launched a review of the energy market after claims were made that suppliers were making excessive profits. | Ofgem launched a review of the energy market after claims were made that suppliers were making excessive profits. |
| Earlier in the year, British Gas said operating profits had risen by 24% in 2010 to £742m. | Earlier in the year, British Gas said operating profits had risen by 24% in 2010 to £742m. |
| In November, Ofgem said that energy supplier's net profit margin per typical customer rose from £65 in September to £90 in November, a 38% rise. | In November, Ofgem said that energy supplier's net profit margin per typical customer rose from £65 in September to £90 in November, a 38% rise. |
| Consumer confidence | Consumer confidence |
| Energy firms could be referred to the Competition Commission if they do not comply with the new system, Ofgem said. | Energy firms could be referred to the Competition Commission if they do not comply with the new system, Ofgem said. |
| "Consumers must have confidence that energy companies are playing fair at a time when they are being asked to foot the £200bn bill to pay for the investment Britain needs to ensure secure and sustainable energy supplies," said chief executive Alistair Buchanan in a statement. | "Consumers must have confidence that energy companies are playing fair at a time when they are being asked to foot the £200bn bill to pay for the investment Britain needs to ensure secure and sustainable energy supplies," said chief executive Alistair Buchanan in a statement. |
| One supplier, Scottish Power, will face an investigation into its pricing regime, Ofgem said. | One supplier, Scottish Power, will face an investigation into its pricing regime, Ofgem said. |
| That investigation is in addition to an ongoing Ofgem investigation into British Gas, EDF Energy and Npower into how they handle consumers' complaints. | That investigation is in addition to an ongoing Ofgem investigation into British Gas, EDF Energy and Npower into how they handle consumers' complaints. |
| Ofgem is also still investigating possible mis-selling by EDF Energy, Npower, Scottish Power, and Scottish and Southern Energy. | Ofgem is also still investigating possible mis-selling by EDF Energy, Npower, Scottish Power, and Scottish and Southern Energy. |
| "In response to customer demand, there is now a wide range of energy products available - such as green tariffs and fixed tariffs - to meet the diverse needs of different customers," said Christine McGourty of the energy industry body Energy UK. | "In response to customer demand, there is now a wide range of energy products available - such as green tariffs and fixed tariffs - to meet the diverse needs of different customers," said Christine McGourty of the energy industry body Energy UK. |
| "If energy companies are not setting out these options clearly enough then this is something that should be addressed." | "If energy companies are not setting out these options clearly enough then this is something that should be addressed." |
| Long-term deals | Long-term deals |
| The regulator also wants to ban automatic rollovers of fixed contracts. | The regulator also wants to ban automatic rollovers of fixed contracts. |
| Some customers pay a set price each month for their energy over the period of a contract, irrespective of price changes for other customers. | Some customers pay a set price each month for their energy over the period of a contract, irrespective of price changes for other customers. |
| Ofgem wants to ban suppliers automatically renewing these deals so customers are not repeatedly tied in to long-term deals. | Ofgem wants to ban suppliers automatically renewing these deals so customers are not repeatedly tied in to long-term deals. |
| A similar ban on automatic rollover contracts for land line telephone lines was proposed by communications regulator Ofcom earlier this month. | A similar ban on automatic rollover contracts for land line telephone lines was proposed by communications regulator Ofcom earlier this month. |
| Instead, customers should default back to the standard tariff, unless they actively choose another fixed-term deal, it said. | Instead, customers should default back to the standard tariff, unless they actively choose another fixed-term deal, it said. |
| Watchdog Consumer Focus welcomed Ofgem's review of the energy market. | Watchdog Consumer Focus welcomed Ofgem's review of the energy market. |
| "Companies are now on a very short leash," said chief executive Mike O'Connor. | "Companies are now on a very short leash," said chief executive Mike O'Connor. |
| "We welcome the explicit statement from Ofgem that the energy market is fundamentally failing consumers and that comprehensive and determined action is necessary to set it on the straight and narrow." | "We welcome the explicit statement from Ofgem that the energy market is fundamentally failing consumers and that comprehensive and determined action is necessary to set it on the straight and narrow." |
| The "big six" energy firms are British Gas, E.On Energy, EDF Energy, Npower, Scottish and Southern Energy and Scottish Power. | The "big six" energy firms are British Gas, E.On Energy, EDF Energy, Npower, Scottish and Southern Energy and Scottish Power. |
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| There is a way to know exactly what you pay and a company which provides a NOT FOR PROFIT energy service. EBICO provide a flat rate for Gas supply and they have a reduced rate available for electricy in all regions, A big move toward a not for profit company would force the energy companies to consider their pricing structure.. | |
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| Might sound strange but true 1.got smart meter still get a person to check reading2.still get estimated bill. 3.got estimated bill for future 25% more.4.how much gas i used last year told 3 different reading ranging from 34000 t044000 units 5.aske they convert unit to KW/or KW to units got differnt formula from 3 different persons from n power muliply by 33 and by 11 and so on do not know. | |
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| Whilst I welcome Ofgem's recent move, I am cautious since historically what normally happens is lot of headlines and no meaningfull action. The best thing Ofgem could do is to oblige all companies to obbey on a pre-set standard plan of tarifs. Then the only variance would effectivelly be the price each would charge each customer rather than the plan itself. This plus control on on cartel will do. | |
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